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“The position of Supply Chain Manager is underrated”

It was predestined that sooner or later Dovre would call on Essensys. One of the successful models of this stove manufacturer from Weelde is after all named Sense. And this collaboration is a pivotal event. Dovre is choosing for a fundamental reorganization of the supply chain at a time when sales are growing. Don’t wait until it’s too late to reexamine your business processes, CEO and owner Tom Gehem realized.

Is it generally known that Dovre is a Belgian company?Tom Gehem: “Dovre was a Norwegian stove manufacturer. My father, Leon Gehem, became the representative for Belgium in 1964. In 1981 he became brand owner and transferred production to Belgium. So Dovre has a Scandinavian origin and at the same time highlights Belgian quality. Perhaps we should emphasize those two aspects more in our communication.”

But you have maintained an international organization?Tom Gehem: “The foundry and the head office are located in Weelde, where 200 people work. In Norway, France and Spain we have branches with 15 employees altogether, and in addition there is an assembly division in Poland where another 100 people work. In other countries we work with importers, 25 in all. Only 10% of our production stays in Belgium; 90% is intended for export. Forty thousand stoves are sold under the name Dovre; another 30,000 stoves are sold in their entirety or as parts under other brand names. We deliver a lot to French companies, and now the Canadian and American markets are also showing interest. Due to the weak position of the euro, but also because no one wants to be completely dependent on the Chinese market.”

What is the status of the sector?Tom Gehem: “Dovre has kept growing in recent years. As a manufacturer we no longer have real competition in our own country. In Scandinavia the market has fallen by 40%, despite the many new small brands. Here the market has stagnated, although the reports about a possible blackout gave us a small boost. We have increased our market share. And the market changes, with smaller stoves for passive houses, for example.”

Stoves are often questioned when there is concern about particulate matter. With good reason?Tom Gehem: “Technologically a great deal has changed, with double or even triple combustion. The problems are open fireplaces and very old stoves. We innovate constantly; 2020 is a pivotal year for the legal standards. Every new model must be extensively tested and approved, so that development of a new stove quickly costs 100,000 euro. And there is the indirect cost. We employ two people for testing in our own lab and also collaborate with a professor in combustion technology at Eindhoven University.”

What was the reason for examining the whole supply chain?Tom Gehem: “The management committee was expanded, with Herman Van Loon as Chief Operating Officer, Rudy Sterkens as Chief Financial Officer and Marcel Roovers as Chief Commercial Officer. A decision was made there to purchase, produce, and distribute more cost-efficiently, and to let the inventory level drop. In addition many new models are in the pipeline and an investment of three million euro in new foundry lines is planned. Dovre was always very production-oriented; we want to safeguard the future of the company.”

In what areas do you want to change the company?Tom Gehem: “Why have our own warehouses in Norway or Spain when shipping agents guarantee delivery within 24 hours? Why keep an inventory in Salon-de-Provence to serve customers in Rijsel from there? Norway, France and Spain are becoming sales offices and customers order via that local office or directly, primarily online now. On the other hand we should plan better and give exact delivery dates. Then we’re coordinating our supply chain, taking account of the practical organization, the cost price and so forth.”

Why did you turn to Essensys with that problem?Tom Gehem: “Internally there was no one with adequate knowhow and time to tackle it. Our CFO had previously had contacts with Essensys, and outsourcing is not a dirty word for us. We call on third parties for IT and transport too. The intake discussion with Tony Geudens from Essensys was very to-the-point, and one day later the result of that profile discussion was already on the table. That was 95% of what was needed right away, and on the basis of that Essensys selected three possible supply chain specialists. We had to choose between a focus on hands-on management or spreadsheet management, a more academic approach. We chose the second option. Although this remains a family business; without any hands-on you don’t make it.”

What sort of person was that interim manager?Tom Gehem: “An experienced manager from the automotive sector. You can’t expect good, experienced employees and foremen to accept just anything from a young person. The interim manager had to ‘sell’ himself along with his ideas and proposals every day; to our CFO, but also to the forklift drivers, to whom you had to make it clear why something can and should in fact be done a little differently. Sometimes he didn’t manage to sell ideas completely, but he did set the trend. He defined the supply chain and scrutinized logistics and inventory. We realize now that the position of Supply Chain Manager, who reports to the COO, is underrated. For a rather substantial SME like Dovre, with increased competition, more models and more countries where we have customers, that Supply Chain Manager plays a crucial role. On the shop floor people realize now that routine isn’t always the right answer; they have seen that we can work even more efficiently without loss of quality. That in itself was an important realization. The interim manager clearly had a real impact.”

What role did Essensys still play after the interim manager had set to work?Tom Gehem: “In the beginning we joked around about it; what could Essensys tell us at that monthly evaluation? But Tony Geudens’ critical questions kept us on task. He kept us focused. After every meeting we had several more action points: What works and what doesn’t? Are we on the right track? What did we want to achieve and by when? Those evaluations were absolutely an added value.”

Is the assignment completed now?Tom Gehem: “The interim manager was supposed to stay six to nine months; it became more than a year. But now we have taken the step of recruiting a permanent Supply Chain Manager as a link between sales and production. That begins in a few weeks and now we want first of all to guarantee continuity. The interim manager has already met with the new Supply Chain Manager, and we may call on him briefly again in the coming months for a smooth transition. We don’t want to lose the achievements, because now the actual conversion of the branches in Norway, France and Spain into sales offices is underway.”

Company Profile:

Stove manufacturer from Weelde that exports 90% of production.

Family business led by Tom Gehem, whose father became the brand owner in 1981 and transferred production from Norway to Belgium.

315 employees, branches in Belgium, Poland, Norway, France and Spain.

Consolidated sales: 38.5 million euro.

In part due to increasingly stricter legal standards, innovation is crucial for further development.

Solutions by Essensys

The comprehensive intake discussion summed up the challenge perfectly and resulted in the right profile for the interim manager.

The monthly progress meetings kept the client on task. What works and what doesn’t? What action points are there?

The systematic approach prevented dilution of the original assignment. Essensys plans along with and dares to disagree with the customer.

Open dialogue, in which Essensys makes its own knowhow available to the customer and the interim manager to achieve a perfect result from the assignment.